Firm-O-Seal CC v Wynand Prinsloo and Van Eeden Inc and Another (3731 / 2020) [2023] ZAMPMHC 34 (19 October 2023)

THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MIDDELBURG LOCAL SEAT

CASE NO: 3731 / 2020

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

DATE 19 October 2023

SIGNATURE

In the matter between:

FIRM-O-SEAL CC

PLAINTIFF

and

WYNAND PRINSLOO & VAN EEDEN INC FIRST

DEFENDANT

DERRICK VAN WYK SECOND

DEFENDANT

JUDGMENT

RATSHIBVUMO ADJP:

Delivered: This judgment was handed down electronically by circulation to the parties' representatives via email. The date and time for hand-down is deemed to be 10H00 on 19 October 2023.

Introduction.

[1] This is a judgment on the special pleas raised by the Defendants to the four Plaintiff’s claims. According to the particulars of claim, the First Defendant is an erstwhile attorney of the Plaintiff whereas the Second Defendant was a member of the First Defendant at the time (jointly referred to as the Defendants). Summons was served on the Defendants on 13 January 2021 and 03 December 2020 respectively. The claims against the Defendants emanate from the instructions given to the Defendants by the Plaintiff in two different matters in which the Plaintiff was involved as a litigant. The Defendants raised special pleas of prescription in respect of all these claims.

[2] In Claim One, the Plaintiff claims from the Defendants, a statement and debatement of account in a matter where it had issued summons against Assmang (Assmang matter) and “payment of whatever amount appears to be due to the plaintiff upon debatement of the account.” In Claim Two, the Plaintiff’s claim mirrors that in Claim One, except that this claim is in respect of a matter in which summons was issued against the Plaintiff by a certain Mrs. Viljoen (Viljoen matter). In this claim too, the Defendants were instructed to defend the action.

[3] Claims Three and Four are for damages suffered by the Plaintiff as a result of alleged Defendants’ professional negligence in handling the Viljoen matter. The professional negligence in Claim Three revolves around damages allegedly suffered as a result of Defendants’ failure to do what a diligent attorney would have done in defending the claim and in prosecuting the application for leave to appeal before the High Court and the Supreme Court of Appeal (the SCA). As for Claim Four, the alleged negligence is over the postponement sought by the Plaintiff (defendant in that matter). The Court granted the postponement and ordered the Plaintiff to pay Mrs. Viljoen’s

costs. The Plaintiff now alleges that it sought a postponement as it was not ready for trial, owing to the Defendants’ negligence.

It now claims for damages in respect of the costs ordered and all the legal fees paid to the Defendants, counsel and the correspondent

attorneys associated with that postponement.

[4] Chronological developments in respect of all the claims are largely common cause. What is disputed is the interpretation of these developments, in particular, whether the claims have prescribed. In essence, the question is about the dates on which these debts became due. To put everything in perspective, it is apposite to gape into the law of prescription before zooming into the particulars of claims.

The Law.

[5] The relevant sections of Prescription Act No. 68 of 1969 (Prescription Act) provides,

“PRESCRIPTION OF DEBTS (ss 10-16)

10 Extinction of debts by prescription

(1) Subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt.

(2) By the prescription of a principal debt a subsidiary debt which arose from such principal debt shall also be extinguished by prescription.

(3) Notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt.

11 Periods of prescription of debts

The periods of prescription of debts shall be the following:

(a) ….

(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.

12 When prescription begins to run

(1) Subject to the provisions of subsections (2), (3), and (4), prescription shall commence to run as soon as the debt is due.

(2) If the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.

(3) A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.

…

14 Interruption of prescription by acknowledgement of liability

(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.

(2) If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run afresh from the day on which the interruption takes place or, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt from the date upon which the debt again becomes due.”

Chronological Developments.

[6] Following are the chronological developments relevant to the special pleas. In April 2014, the Plaintiff gave instructions to the Defendants, as attorneys, to act on its behalf in claiming money from Assmang. Summons against Assmang was issued on 11 April 2014. While the Assmang matter was pending, the Plaintiff was joined as a third defendant in the Viljoen matter on 24 October 2014. The Defendants were appointed as attorneys for the Plaintiff even in the Viljoen matter. In the Viljoen matter, trial on merits was separated from the quantum determination. Judgment on merits was handed down on 27 October 2016 wherein, the Plaintiff was held 100% liable for agreed or proven damages. The Plaintiff was also ordered to pay the costs. On 07 December 2016, the High Court dismissed an application for leave to appeal. A further application for leave to appeal was petitioned with the SCA, only to be dismissed on 17 May 2017.

[7] Meanwhile, the Assmang matter was settled on 04 November 2016 when Assmang agreed to pay the Plaintiff R4 500 000.00 plus costs. The settlement agreement was made an order of court on 07 November 2016. When Assmang made a payment of R4 500 000.00 on 09 November 2016, R1 000 000.00 of it was kept by the Defendants to cater for their fees whereas R400 000.00 was transferred to the Viljoen file where it would serve as a deposit for the Defendants’ fees. As a result, by 10 November 2016, the Plaintiff did not owe the Defendants in respect of the Assmang file. As a result, the balance of R3 100 000.00 was paid to the Plaintiff. The only remaining issue in the Assmang matter was therefore the taxation and collection of the plaintiff’s costs.

[8] On 30 November 2016 the Viljoen matter was enrolled for trial on quantum on 15 September 2017 (this date was changed to 18 October 2017). By the end of August 2017 it became clear to the Plaintiff’s Directors and/or members, Mr. and Mrs. Cornelius, that the Plaintiff would not be ready for trial on allocated date. On 22 September 2017 the Defendants withdrew as Plaintiff’s attorney of record. Badenhorst Attorneys, who until then had been the correspondence attorneys used by the Defendants in the Viljoen matter, took over as the Plaintiff’s new attorneys. Adv Greef continued as their counsel like he did when the Defendants were still on record. The Defendants remained as Plaintiff’s attorneys in the Assmang matter, the costs of which were not yet taxed.

[9] On 12 October 2017, less than a week before the trial on quantum could commence, the plaintiff filed an application for postponement of the trial on quantum. The founding affidavit was deposed to by Mr Cornelius, whilst the Second Defendant and Mr Badenhorst from Badenhorst Attorneys, filed confirmatory affidavits in support of the application. The application was opposed by Mrs. Viljoen. In the affidavit Mr. Cornelius, alleged inter alia the following, which was confirmed by the Second Defendant,

“It was explained to the Defendants by our erstwhile attorney of record, Mr D van Wyk, that the notice of set down had not come to his attention, due to lost correspondence between himself and his correspondent attorney (the present attorney of record) in Pretoria.

We were informed that the correspondence had ended up in a mail box of a personal assistant who had resigned from the employ of the Defendant’s erstwhile attorneys. In addition hereto Mr van Wyk further informed the Defendants that he had not been expecting a notice for the trial on quantum prior to receiving notification from the correspondent attorneys in Bloemfontein or the Plaintiff’s

attorneys regarding the outcome of the application for leave to appeal, in light of the pending appeal proceedings on issue of

liability and causation.

The trial date, of 15 September 2017, was brought to the attention of Mr van Wyk by counsel for the first time on 23 August 2017.

The Defendants had, until 1 June 2017, upon notification by the Plaintiff’s attorney of record, as stated in paragraph 8 above, bona fide and genuinely believed that they had good prospects of success on appeal and were they in fact advised that the Supreme Court of Appeal would in all probability overturn the finding of the Court a quo.”

[10] It is now the Plaintiff’s contention that the contents of the affidavit quoted above were the results of misrepresentation made out by the Second Defendant to Mr. Cornelius, as he now knows that the Second Defendant was aware of date of trial from the time it was set down as it was served on him and he even acknowledged receipt thereof. This information was relayed to him and/or the Plaintiff once it was unearthed by Mr. Danie Schutte, the Plaintiff’s current attorney of record. This happened a few

years later, after he became the Plaintiff’s attorney.

Before this court.

[11] Mr. Schutte is the only witness to have given evidence in this trial. The Defendants preferred to rather hand in exhibits the pleadings. While Mr. Schutte’s evidence was helpful, it was mainly to point to various exhibits and to explain the role he played in the process of unearthing what the Plaintiff did not know. His evidence is largely undisputed because there is a paper trail of almost everything he did ever since he took over as Plaintiff’s attorney. Every phone call he made or received from the Defendants is followed up by a confirmatory email to them in which he places on record what the conversation was all about. The only aspects of his evidence that remain disputed are his opinions or interpretation of some of the exhibits and/or email correspondences.

[12] The Defendants were critical of the Plaintiff’s failure to call Mr. Cornelius who was present in the room in the company of Mr. Schutte on the date of this trial. The Defendants argued that the court should draw negative inference over its failure to call him as a witness. While the gist of argument regarding failure to call a witness who is available is correct, the court finds no basis to take this line of approach in the circumstances of this case for two reasons. First is the burden of proof which when it comes to plea of prescription, falls squarely on the Defendant’s shoulders.[1] Secondly, facts of this matter are mainly common cause. Because of that, this case will be decided on interpretation of undisputed facts and the application of the law to them. For those reasons, there I find no basis to draw negative inference over the failure to have Mr. Cornelius called as a witness.

Claims One & Two:

[13] Once Mr. Schutte entered into the arena, he in January 2018, acting on Plaintiff’s instructions, requested the Defendants to furnish him with three files that were handled by them (including the Assmang and the Viljoen files) and their statements of account. On 02 February 2018, the Defendants replied via email saying, “the files are currently

with the cost consultant and will be made available to [Mr. Schutte] on receipt and payment of our accounts.”

[14] It was only on 18 December 2018 that the Defendants sent a statement of account in the Viljoen matter to Mr Schutte. On the same date, they for the first time provided the Plaintiff with a statement of account in the Assmang matter which, the Plaintiff alleges in the particulars of claim, was incomplete. This was also for the first time that the Defendants

claimed reliance on the contingence fee agreement for their fees’ calculation. The Plaintiff dispute that the files were with a tax consultant for 11 months as suggested by the response to the demands dated 02 February 2018. Later Mr. Schutte discovered that the Assmang file was not with a cost consultant but a certain Mrs. Botha.

[15] I am inclined to agree with the Plaintiff that the statement of account in Assmang matter could not have been complete when it is submitted without reflecting:

a) the deposit payment of R5 000.00 that the Plaintiff paid to the Defendants right at the beginning,

b) the taxed bill of costs payable by Assmang,

c) a breakdown of money paid to the counsel,

d) a breakdown of money paid to the correspondence attorneys and

e) a breakdown of the Defendants’ fees and disbursement.

[16] I am equally inclined to agree that the statement of account in respect of the Viljoen matter was incomplete as:

a) it did not reflect a breakdown of money paid to counsel,

b) it did not reflect a breakdown of money paid to the correspondence attorneys,

c) it did not reflect a breakdown of the fees and expenses of the Defendants and

d) the claimed fees over a period did not correspond with the fees as per the draft bill of costs sent to Mr. Schutte.

[17] On 14 January 2019, the Defendants availed the Viljoen file to Mr. Schutte, but it was incomplete with summons and other pleadings and consultation notes missing. From the documents

discovered by the First Defendant in June 2019, Mr. Schutte found a letter in which the First Defendant confirmed that a contingency fee agreement between them and the Plaintiff was with them in safe keeping. It was through the discovery of some documents that more information was brought to the Plaintiff’s attention resulting in all these claims against the Defendants.

[18] It is important to note that of the two demands in the particulars of claim in respect of Claims One and Two, one is a demand for accounting which even at the time this matter was heard, Mr. Schutte testified that he was yet to be furnished with a complete statement of account. The other one is a demand for payment of money that would be found to be due to the Plaintiff after the accounting. While the Plaintiff’s interest is obviously the refund of any money not accounted for, it has to go through the accounting first. The Plaintiff alleges that it could not have had the knowledge of overcharging and the professional negligence by the Defendants prior to Mr. Schutte representing it and started to unearth this information from the files that up to then, had been kept away from it.

[19] According to the Prescription Act, a debt shall not be deemed to be due until the creditor has knowledge of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care. With the common cause facts above, there is no way that the Plaintiff could have been aware of the facts giving rise to Claims One and Two as the information was kept away from it.

[20] In essence, I share the views expressed by the Defendant’s counsel when he said, the basic principle on the running of prescription is that the debt will be due, and the prescription period commences to run as soon as there is a completed cause of action, with a plaintiff who can sue and a defendant who can be sued. Completion of the cause of action is ‘when everything has happened which would entitle the creditor to institute action to obtain judgement.’[2] I am not persuaded that everything had happened in these claims, entitling the Plaintiff to institute an action against the Defendants.

[21] Furthermore, the fact that after several correspondences by the Plaintiff’s new legal representative, the files took over 11 months to be delivered, without full accounting; pushes me to agree that the Defendants were actively involved in preventing the Plaintiff from becoming aware of the full facts giving rise to these claims. The special plea of prescription on Claims One and Two stands to be dismissed for these reasons.

[22] I reach this conclusion bearing in mind the fact that the evidential burden of proof when prescription is raised, falls on the Defendants.

In Maclead v Kweyiya,[3] the SCA held,

“This court has repeatedly stated that a defendant bears the full evidentiary burden to prove a plea of prescription, including the

date on which a plaintiff obtained actual or constructive knowledge of the debt. The burden shifts to the plaintiff only if the defendant has established a prima facie case.”

[23] In casu, the Defendants chose not to give evidence at all. This they did even when they knew that the Plaintiff alleged in the replication that,

“[T]he defendants wilfully prevented the plaintiff from coming to know the existence of the debt in one or more or all of the following ways: The draft bill of costs was only made available (incomplete) more than 11 months from the request thereto. Parts of the defendants’

office file were only made available almost a year after the written request thereto. The plaintiff was at all relevant times not indebted to the defendants. The defendants delayed the drafting of the bill of costs and the delivery of their office file. Prior to the plaintiff terminating the defendants’ mandate and thereafter (including after issuing of summons), material information relevant to the knowledge of the defendants’ negligence, were withheld from, alternatively misrepresented to the plaintiff by the defendants.”

[24] In case I am wrong in my findings hitherto, I would reach the same conclusion on the basis that prescription in respect of Claims One and Two was interrupted within the meaning of section 14(1) of the Prescription Act. In an email dated 02 February 2018, the Defendants did not only acknowledge the right of the Plaintiff to access the Assmang and the Viljoen files, but also undertook to avail them, something that they fulfilled some 11 months later. With that interruption, the prescription is supposed to start running afresh from 02 February 2018. For this reason too, I find that Claims One and Two had not prescribed at the time summons was issued.

Claim Three.

[25] In respect of Claim Three, the Defendants’ plea of prescription is grounded on the High Court judgment on merits handed down by Judge Mali in the Viljoen matter. In finding against the Plaintiff, the High Court made reference to the Plaintiff’s failure to call a guard who was on duty on the date of the incident. This, according to the Defendants, gave the Plaintiff, minimum facts required to show that the Defendants failed to execute their mandate with diligence. The Defendants submit further that the correctness of the High Court

judgment was common cause between the parties.

[26] Part of the Plaintiff’s claim of negligence under Claim Three, is that the Defendants should have pleaded ‘disclaimer’ to Mrs. Viljoen’s claim. The Defendants plead that the High Court judgment made reference to what Mrs. Viljoen’s counsel said when he pointed out that ‘disclaimer’ was not pleaded. In light of these aspects being contained in the judgment, the Defendants contend that prescription should start running from the date the judgment was handed down, or at least, from the date that the leave to appeal was refused by the SCA as that refusal resulted in the High Court judgment becoming final.

[27] The difficulty I have with this contention is that it equates the submissions made in closing arguments and referred to in a judgment to finding by a court, which is not. In reading that judgment, I am unable to reach a conclusion that the blame or negligence was apportioned to the Plaintiff’s legal representatives by the court, so as to say, the minimum facts required for the debt to start running, were conveyed therein.

[28] Even if it was to be accepted, hypothetically so, that the High Court judgment conveys the minimum facts required by the Plaintiff to institute an action; my further concern is that at the time it was handed down, the Plaintiff’s legal representatives, brought the applications for leave to appeal it. They obviously must have been conveying a different message regarding the correctness of the judgment. While the correctness of the judgment may be common cause in pleadings’ exchange, it obviously was not so at the time it was delivered.

[29] Moreover, the professional negligence alleged by the Plaintiff under this claim, covers the period way beyond this judgment. For example, Mr. Schutte, by way of discovery, found out that in an application for leave to appeal before the SCA, no replying affidavit was filed to challenge Mrs. Viljoen’s answering affidavit. Because of that, the contents of the answering affidavit were unchallenged. The Plaintiff now claims that such conduct was nothing less than negligence on the part of the Defendants as there was a duty to reply to the answering affidavit.

[30] For these reasons, I am unable to find that the debt in respect of this claim became due and payable on the date the judgment was handed down by the High Court. I hold a view that at that stage, the Plaintiff did not have the minimum facts required to institute a claim.

Claim Four.

[31] In respect of Claim Four, I hold a view that even as Mr. Cornelius deposed to an affidavit[4], in which a postponement was sought, on 12 October 2017; he had minimum knowledge of the facts that give rise to the debt becoming due and payable. One can read from the affidavit in question, that he was aware that the notice of enrolment of the trial on quantum was not attended to by his attorneys, that experts should have been appointed on his behalf in preparation for the trial on quantum, and none were appointed, and that at that stage, there was insufficient time to consult with the witnesses. Mr. Schutte conceded as much under cross examination.

[32] In an email directed to Mr. Badenhorst penned by Mr. Cornelius on 18 October 2017, the following appears in paragraph 4. “Because of this problem on Mr. Van Wyk’s side, there were, as you are aware, a massive delay with the preparation of the matter, which led thereto that wasted costs in this regard are claimed from me.” This statement was made by a person who had minimum facts required to ascertain the existence of a debt. In light of this, I am of a view that the concessions by Mr. Schutte, were wisely made.

[33] It is not necessary for a creditor to have all the facts he requires in order to prove the claim, for prescription to start running. In Minister of Finance and Others v Gore NO[5], the SCA held,

“[T]his Court has, in a series of decisions, emphasised that time begins to run against the creditor when it has the minimum facts that are necessary to institute action. The running of prescription is not postponed until a creditor becomes aware of the full extent of its legal rights, nor until the creditor has evidence that would enable it to prove a case 'comfortably.”

[34] Prescription in respect of Claim Four started to run on the date Mr. Cornelius deposed to an affidavit which is 12 October 2017 or at the latest, on the date on which a postponement of the trial on quantum was granted by the court, which is 18 October 2017. The date on which an order granting a postponement was made, is the date from which damages allegedly suffered by the Plaintiff flow from, given the costs order made by the court. This claim prescribed therefore in October 2020.

[35] For the reasons set out above, the following order is made.

[35.1] The Defendants’ special pleas in respect of Claims One, Two and Three are dismissed with costs.

[35.2] The Defendant’s special plea in respect of Claim Four is upheld.

[35.3] Plaintiff’s claim in respect of Claim Four is dismissed with costs.

TV RATSHIBVUMO

ACTING DEPUTY JUDGE PRESIDENT

MPUMALANGA DIVISION, MIDDELBURG

FOR THE PLAINTIFF: ADV GREYLING INSTRUCTED BY: KARIEN SCHUTTE ATTORNEYS MIDDELBURG FOR THE DEFENDANT: ADV MYBURG INSTRUCTED BY: NGWANE MAMOD INC C/O: GIFT PISTORIUS INC MIDDELBURG JUDGMENT RESERVED: 23 AUGUST 2023 JUDGMENT DELIVERED: 19 OCTOBER 2023

[1] See paragraph 22-23 below.

[2] Truter & Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA) para 16.

[3] 2013 (6) SA 1 (SCA) para 10.

[4] See p. 939 of the paginated bundle – Evidence bundle.

[5] 2007 (1) SA 111 (SCA) para 17.